Answered

Get comprehensive solutions to your questions with the help of IDNLearn.com's experts. Get comprehensive and trustworthy answers to all your questions from our knowledgeable community members.

Peter Pundit has been hired by a (rather biased) news outlet to provide a cost benefit analysis of proposed nuclear power plant that refutes an earlier one done by environmentalists. The environmentalists’ analysis shows that the long term cleanup costs outweigh the short term benefits. In trying to counter the environmentalist’s report, Pundit would most likely…

Sagot :

Jepessoaidn

Answer:

Use a higher discount rate and assume that cleanup would occur later.

Explanation:

When you are evaluating cash flows, the higher the discount rate, the lower the present value. Also, if the discount rate occurs farther away into the future, its present value will be lower. For example, a cash flow that occurs in 10 years will have a lower present value than a cash flow that occurs in 5 years.

We are happy to have you as part of our community. Keep asking, answering, and sharing your insights. Together, we can create a valuable knowledge resource. IDNLearn.com provides the best answers to your questions. Thank you for visiting, and come back soon for more helpful information.